Newspaper article St Louis Post-Dispatch (MO)

Hops Unhip German Breweries Closing as Taste for Beer Goes Flat

Newspaper article St Louis Post-Dispatch (MO)

Hops Unhip German Breweries Closing as Taste for Beer Goes Flat

Article excerpt

From southern Bavaria's sunny hops fields to northern Bremen's malty brewing vats, beer brewing and drinking has nourished German commerce for centuries. To try all 5,000 home-made brews, a connoisseur would have to try a different beer each day for 13 years - not an easy task even for Germans, who consume a yearly average of 35 gallons of beer apiece.

But those figures notwithstanding, the golden days of German brewing appear to be over. The German beer market is going flat.

How could the beer business lose its fizz in a country of medieval beer purity edicts, beer-swilling Oktoberfests, and 1,250 breweries producing enough suds to generate $13 billion in yearly sales? The answer is that Germans are drinking less and less beer - almost a gallon less today than 15 years ago.

With consumption falling, Germany's crowded field of breweries, half of which are operating in the red, are making too much beer. One consultant estimated that if each of the 1,250 breweries met its capacity, Germans would end up with twice as much beer as they drink.

Indeed, more than 100 German beer producers have gone out of business in the 1990s, including three dozen in Bavaria, a beer stronghold and home to 700 breweries.

Germany's largest brewing and beverage conglomerate, Brau und Brunnen AG, is making a profit on mineral water and soft drinks but is selling off some of its struggling beer operations. Many German brewers of dark or amber beers also are in serious financial trouble because sales have dropped so sharply. In fact, the brewers' financial problems are so severe that Munich's Roland Berger & Partner management consulting group recently predicted that half of Germany's breweries may close over the next 15 years.

Which brewers are likely to survive? Premium beers with strong brand identity; big export labels like Beck's; and cheaply made discount brews.

The rise of discount beers and trendy brews, including light beer, is shocking to Germany's brewing traditionalists, who look for a sign of quality to beer-purity laws dating from 1516. A decade ago canned beer was rare in Germany, accounting for only 3.4 percent of the packaged beer sold in 1980. …

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